Forest Laboratories, Inc. ( FRX - Analyst Report ) and Ironwood Pharmaceuticals, Inc. ( IRWD - Snapshot Report ) recently announced that they received US Food and Drug Administration (FDA) approval for Linzess (linaclotide). Linzess is approved for the treatment (once-daily) of adults suffering from irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC).

The label comes with a boxed warning stating that Linzess is contraindicated in pediatric patients up to 6 years of age. Moreover, Linzess’ use in pediatric patients 6 through 17 years of age should be avoided.

The FDA was previously expected to deliver a decision on Linzess in June 2012. However, the agency had extended its review period by three months to September following the submission of additional analysis of existing data.

Linzess’ approval is a major milestone for Forest Labs, which is currently facing generic competition for depression drug Lexapro. Over the past few years, Forest Labs has been very active in signing in-licensing and partnership deals with the intention of expanding its pipeline.

Forest Labs has several interesting candidates in its pipeline, which if developed successfully, should help compensate for a part of the loss of revenues with the genericization of Lexapro.

Linzess is the second candidate in Forest Labs’ portfolio to gain approval in the last few weeks. In late July 2012, the company had gained FDA approval for Tudorza for the long-term maintenance treatment of bronchospasm associated with chronic obstructive pulmonary disease (COPD), including chronic bronchitis and emphysema. Both Linzess and Tudorza are slated to launch in the fourth quarter of 2012.

Meanwhile, the company remains on track to file for approval of two more candidates (levomilnacipran and cariprazine) by year end. Levomilnacipran is being developed in collaboration with Pierre Fabre Medicament for the treatment of depression.

Successful commercialization of the candidate would build on Forest Labs’ already strong presence in the depression market. Cariprazine is being developed for the treatment of schizophrenia, bipolar mania and other psychiatric conditions.

We currently have a Neutral recommendation on Forest Labs, which carries a Zacks #3 Rank (short-term Hold rating). We expect investor focus to remain on the successful commercialization of new products.